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A city business group has become so fed up with Sydney's slow trains, traffic jams and the Cross City Tunnel debacle that it is setting up a free bus service to move people around the city.

The City Partnership, a group of up to 100 businesses, will run a service from Central Station to The Rocks on a loop, paid for by advertising and sponsorship.

Its president, Stephen Taylor, said a light rail system as advocated by the Lord Mayor, Clover Moore, was the "most logical solution" to improving traffic within the city centre.

"But the Cross City Tunnel contract has revealed that any successful public transport initiatives driven by the State Government would impose severe financial penalties on the state in favour of the tunnel operators, effectively killing off this option," he said.

So his organisation plans to set up a service which will circle the city centre, eventually extending to inner suburbs like Kings Cross, Newtown and Glebe. Mr Taylor is negotiating with a bus manufacturer and is seeking sponsors.

"Perth and other cities have had the guts and vision to provide this type of service," he said. Mr Taylor's plan came a day after the head of the Roads and Traffic Authority, Paul Forward, was forced to resign for not revealing an amendment to the tunnel contract that was signed in December. But at least two Labor cabinet members were involved with the deal before it was entered: the former roads minister, Carl Scully, and the former treasurer, Michael Egan, who gave his written consent.

But yesterday, no minister, from the Premier, Morris Iemma, down, was taking responsibility.

Mr Scully denied any wrongdoing. His spokesman, Jim Hanna, said: "Carl did everything he was required to do as minister.

"He had to get approval from Treasury before the RTA could authorise the company to add 15 cents to the toll. The company came to Carl, said there was this $35 million work that needs to be done, he went to the Treasury who said 'no public money'."

The parties then agreed on a toll rise, Mr Egan ticked it off and it was signed on December 21, less than a month before the portfolio switched to Michael Costa, who denies knowing anything about the deal.

Opposition parties are trying to call both the former premier, Bob Carr, and Mr Egan to give evidence at an upper house inquiry, with the Opposition Leader, Peter Debnam, saying both were critical to the deal.

Operators said that during the first week of the three-week free period, about 44,000 cars used the tunnel on Monday, Wednesday's traffic volumes exceeded 50,000, while Thursday and Friday both had more than 55,000 cars using it. So many people were using it yesterday afternoon, that traffic in the eastbound tunnel came to a standstill. That is well up on a Herald count which found 20,000 were using it on weekdays, before the free trial period.

The Minister for Roads, Joe Tripodi, was first told of the secret contract last week, but his spokeswoman said he did not reveal it until Thursday because he wanted to be sure of its details.

Meanwhile, another senior transport public servant has quit. John Lee, the Ministry of Transport's director-general, told the Herald: "My father's health is deteriorating and I want to care for him the way he's cared for me."

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1130400366687-smh.com.auhttp://www.smh.com.au/news/national/welcome-to-your-free-bus-ride--which-is-brought-to-you-today-by-x2026/2005/10/28/1130400366687.htmlsmh.com.auSydney Morning Herald2005-10-29Welcome to your free bus ride - which is brought to you today by …Tim Dick and Andrew ClennellNational